Axos with Michael Watson | E345

RIA custody meets digital banking.

In this episode of Fintech Impact, host Jason Pereira interviews Michael Watson, head of Axos Advisor Services, on how Axos aims to revolutionize the traditional custodial and banking services for RIAs (Registered Investment Advisors). Axos, a digital bank established in 2000, evolved from a consumer-focused bank to a comprehensive provider offering commercial banking, securities business, and custodial services. The acquisition of E-Trade's custody business is highlighted as a strategic move to diversify and solidify Axos' position in the market. Watson details the company's commitment to providing high-touch, personalized services and the integration of digital banking solutions catering to RIAs and their clients, emphasizing the importance of service quality, efficiency, and not competing with advisors for clients.

Episode Highlights:

  • 00:09: Introduction to Axos Advisor Services and its aim to integrate custodian servicing with banking for RIAs.

  • 00:27: Michael Watson expresses his pleasure in joining the conversation and discussing Axos' services.

  • 00:34: Axos' journey from being one of the first digital banks founded in 2000 to expanding into commercial banking and securities by acquiring a clearing firm and eventually E-Trade's custody business.

  • 01:54: Watson discusses the rationale behind Axos' entry into the securities business, focusing on diversification and capitalizing on low-interest rates for low-cost funds.

  • 03:07: The evolution of Axos from its inception as Bank of Internet to a comprehensive digital and commercial banking provider.

  • 05:20: Watson emphasizes Axos' commitment to outstanding service, citing the differentiation in their approach to onboarding RIAs and providing personalized, efficient solutions.

  • 08:32: The conversation moves towards Axos' capability in providing digital workflows and eliminating operational inefficiencies through automation.

  • 10:08: Axos' strategy to support RIAs with banking solutions, touching on the unique opportunity to aid advisors in business transitions and expand their service offerings.

  • 13:55: Early feedback on Axos' integrated banking and brokerage services following their launch, highlighting the digital convergence for an improved client experience.

  • 16:33: The discussion includes the initial success of banking offerings since launch and the eagerness among RIAs to adopt these services.

  • 20:26: Forward-looking insights into the convergence of broker-dealer, technology, and custodial segments in the financial industry.

  • 24:02: Watson shares his wish for a change in the industry toward more value-aligned advisor pricing models.

Key Takeaways:

  • Axos Advisor Services aims to be a pivotal player in blending custodial services with banking for RIAs, leveraging its digital bank foundation to offer streamlined, efficient solutions.

  • The acquisition of E-Trade's custody business illustrates Axos' strategic initiative to diversify and enhance their offerings in a competitive market.

  • Commitment to service excellence and the integration of digital banking functionalities are central to Axos' strategy in fostering relationships with RIAs and their clients.

  • There's a significant focus on automating operational processes to reduce inefficiencies, providing RIAs with seamless experiences in managing their banking and custodial needs.

  • Axos is exploring innovative ways to support the business and expansion needs of RIAs, including addressing financing challenges for succession planning within these advisory firms.

Tweetable Quotes:

  • "In a world where digital transformation defines success, Axos brings banking and custodial services into a new era for RIAs." - Michael Watson

  • "Service excellence isn't just a goal; it's our commitment to every RIA we partner with." - Michael Watson

  • "Advisors need banking solutions that understand and complement their unique offerings, not compete with them." - Michael Watson

  • "Automation in banking isn't just about efficiency; it's about enabling RIAs to focus on what they do best - serving their clients." - Michael Watson 

Resources Mentioned:

Fintech ImpactJason PereiraFintech